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What is long-term care insurance?

What is long-term care insurance?

Long-term care insurance helps to target a wide range of services that may not be covered under a regular health insurance plan. This includes coverage for services such as activities of daily living: like light cleaning, bathing, and getting in and out of bed.

Additional benefits of long-term care insurance

Employer-based health coverage will not pay for daily, extended care services. Medicare on the other hand may cover a short period of in-home care, but only under strict and limiting conditions.

Long-term care insurance is designed to help offset the cost of care when you have a chronic condition, illness, or disability such as Alzheimer’s or Parkinson’s disease. Many policies will reimburse you for provided care received in a variety of places such as:

An assisted living facility

A nursing home

Your home

How do I apply for long-term care insurance?

Similar to other insurance policies, you will need to fill out an application with the company of your choice. The application will request basic contact information and policy-specific medical questions. Most long-term care policies have a maximum payout amount that would limit both daily as well as lifetime payouts received under the policy. Based on this, you will want to select a plan that best fits your needs based on the tradeoff of coverage offered and the premium charged for the policy.

Once the application is filed and approved, you will receive your effective policy and begin paying premiums towards your coverage.

When is it too late to apply?

While it is truly never “too late” to apply for long-term care insurance, as the premium starts to increase as you age. Additionally, the longer you wait to apply, the more likely you are to be denied. Of applicants aged 70+,45% of applicants have their applications denied, compared to less than 18% denied for those younger than 55. At a certain age, the premiums charged may begin to outweigh the benefits offered by the insurance policy. There is a large benefit to purchasing long-term care insurance early in life rather than later.

When can I file a claim?

Though there is no designated filing time, the best moment to file a claim is the moment you or a loved one is showing signs of needing care. Most long term care insurance policies involve “elimination periods” or waiting time frames prior to pay outs. Additionally, this elimination period can last anywhere from 30 to 90 days, meaning the payments for home care services will have to come out-of-pocket until it is reimbursed by the insurance policy.

Additional factors contributing to the cost

There are many factors that can affect the cost of long term care insurance for you or your loved one other than simply age. Some additional factors that play a role in your cost of premium include:

Current Health

Marital Status

Insurance Company Chosen

Type of Coverage Chosen

Still have questions?

Do you or a loved one have additional questions about your long-term care insurance or even where you can apply for a policy? Maybe need some assistance with filing a claim on your policy?